Burma Economic Zone to ‘Go Down in History’
By Kyaw Hsu Mon 4 November 2013
RANGOON — Burma’s first special economic zone is set to begin operations next month on a sprawling complex about 25 kilometers south of Rangoon, and Set Aung is playing a major role. As chairman of the Thilawa Special Economic Zone (SEZ) management committee, he has helped oversee preparations to launch the Japanese-backed zone, which is 51 percent Burmese owned and will include a deep sea port, factories and large housing projects.
The Thilawa SEZ has been controversial among local farmers, who say their land was confiscated without proper compensation, but despite complaints the project has moved forward, and last week Japan’s Thilawa SEZ Company Ltd. (JTSC) signed a joint-partnership agreement in Tokyo with Myanmar Thilawa SEZ Holdings Public Ltd. (MTSH). In this interview, Set Aung offers more details about the timeline, investment and possible benefits of the special economic zone, while also responding to allegations of unfair compensation.
Question: When will the Thilawa SEZ project be up and running?
Answer: We expect that the Thilawa Special Economic Zone’s construction will start next month—in December—or in early January.
Q: Japanese investors have signed a joint-venture deal that gives 51 percent ownership of the project to Burma. The Burma government and a Burmese company, the MTSH, are expected to sell shares to the public. Can you tell me more about that?
A: For the shares, 51 percent is on Myanmar side. Of that, 41 percent is private [belonging to MTSH]. I can’t say when they will start to sell shares, but I can say that we, the government, have given them guidelines—for example, regarding how much a share price should be.
Q: How big is the SEZ?
A: The project includes 400 hectares, which is about 900 acres. [The first stage includes work on 400 hectares of the 2,400-hectare Thilawa SEZ.]
Q: At a press conference last month, complaints were heard from farmers who lost their land for the project. They said they had been pressured by the government to accept unfair compensation for their property.
A: Farmers held a press conference, but none of them had lost land from the 400-hectare project area. Actually, people in the 400-hectare area have already signed an agreement. The farmers at the press conference will need to move in five years—they will not move in the first stage. They said they were not accepting compensation, but people in the first stage have already agreed to move.
Q: How much Japanese investment will be required for the entire project?
A: There will be two phases, internal and external. For internal projects, such as the construction of factories, it will cost US$1 million. But for external projects, such as infrastructure, I can’t say exactly how much because related ministries will take responsibility. For example, the Ministry of Electric Power will take responsibility for power plants, while the Ministry of Construction will take responsibility for roads and the drainage system.
Q: Thilawa will be the first operational special economic zone in Burma. What benefits will it have for the people? How will the zone promote the country’s economic reform, and what products to you expect to be produced?
A: This SEZ will be an industrial zone that goes down in Burmese history. It will be quite a change in the industrial zone sector. We’re constructing infrastructure and factories to produce projects. In 2015, factories will be finished and infrastructure in the zone will also be complete.